In Cuba, connecting to the Internet costs four times the average annual salary

In Cuba, connecting to the Internet costs four times the average annual
salary
By Caitlin Dewey, Published: October 8 at 12:23 pm

Broadband prices have fallen across the board since 2008, but remain
higher in the developing world. (ITU)

You might not guess it from your Internet bill, but the United States
has some of the cheapest broadband in the world — right up there with
Kazakhstan, India and Bangladesh.
That’s one of many surprising, and occasionally puzzling, revelations in
a new report from the International Telecommunication Union, which
tracks the use, cost and penetration of information networks around the
world. Many of the overarching trends the ITU identifies are likely
things you’ve heard before: Internet use is growing, particularly on
phones; growth has plateaued a bit in developed countries; a huge gap
remains between the most and least wired nations. That gap has, more or
less, Western and wealthy Asian countries on the more wired end of the
spectrum, with African and poorer Asian countries on the other.

But there are some surprises — like where Internet access is most
expensive. While a number of factors play into the cost of getting
online, geography seems to matter quite a bit, at least on the extreme
ends of the spectrum. Island nations have more expensive Internet,
perhaps because of the unusual cost of running the infrastructure into
the country. These are the countries where a monthly fixed broadband
subscription is most expensive, as measured by its normalized (i.e., at
purchasing power parity) cost. The first number is the cost of Internet
access, relative to the average purchasing power in that country. The
second number is the absolute cost.
1. Eritrea, 1596.50 ($1,951.67 USD)
2. Cuba, no cost PPP ($1,760.45)
3. Democratic Republic of the Congo, 650.91 ($400.22)
4. Kiribati, 615.46 ($428.28)
5. Solomon Islands, 502.61 ($259.17)
6. Papua New Guinea, 271.10 ($185.58)
7. Timor-Leste, 175.44 ($99.00)
8. Sao Tome and Principe, 163.14 ($116.77)
9. Vanuatu, 158.75 ($105.17)
10. Madagascar, 132.72 ($63.70)

Of course, the raw cost of an item is less telling than the
affordability — that is, the cost relative to the typical income in
that country, which the report calculates as a percentage of the gross
national income per capita. These are the places with the most
affordable Internet in the world by that metric. Macao, a city-sized
Special Administrative Region in China, is the cheapest, with Internet
costing only 0.2 percent of the average resident’s annual income. You
can see that richer countries tend to do well here, perhaps because the
state buys lots of infrastructure on the front end that makes it more
affordable for individual buyers.
1. Macao China — .2% of GNI per capita
2. Kuwait — .4%
3. United States — .4%
4. Switzerland — .6%
5. Luxembourg — .6%
6. Andorra — .6%
7. United Kingdom — .7%
8. Japan — .7%
9. Norway — .7%
10. Hong Kong — .7%

What’s going on here? On the most fundamental level, it’s often an issue
of supply, demand and competition. Macao, which sits amid the web of
underseas fiber-optic cables that connect China, Japan, Singapore and
the Phillipines, has vastly more Internet infrastructure than the
Solomon Islands. It also has lots of competition among Internet
providers, simply because there are enough people to support it. The
Solomon Islands, on the other hand, are just linking up to the cable
that connects Sydney and Guam. There seems to be a similar situation in
other parts of the developing world, where more than half the population
lives in rural areas — making them costlier to wire to the Internet, in
both absolute and per-customer terms. That keeps prices high and
adoption low.

There are a vast array of other factors at work, of course. Things like
literacy, education and poverty help determine how many people have the
skills and disposable income to support a local Internet industry.
Industry liberalization and privatization also tend to drive costs down,
as do national policies that support a strong infrastructure or promote
Internet literacy. Bahrain, for instance, saw a big year-over-year jump
in its cellphone penetration rate after passing a policy that let users
keep their number when they switched providers. Costa Rica’s mobile
penetration more than doubled after 2008, when the country passed a law
ending a long-standing monopoly there.
Meanwhile, Cuba’s Internet remains so wildly expensive because it’s only
available to the average person at 118 government-run cafes, where
computers cost $4.50 an hour to use. By comparison, CNN reported in
August, the average state employee makes about $20 a month.
The good news is that the Internet has gotten dramatically more
affordable worldwide over the past five years — down from 115.1 percent
of GNI per capita in 2008 to just 22.1 percent in 2012. That, along with
infrastructure expansion and tech-friendly policy, has allowed 40
percent of the world’s population to get online.
Of course, that still leaves the other 60 percent — to say nothing of
the 39 “least connected countries,” or LLCs, where Internet penetration
and participation is particularly low. Fortunately, current trends
project those countries to adapt both fixed and mobile broadband pretty
rapidly, even as growth in more developed countries plateaus. In Africa,
for instance, Internet penetration has doubled in the past four years.
That’s pretty good.

*Caitlin Dewey*is a social media reporter on the Digital Audience team.
Before joining the Post, she was an associate online editor at
Kiplinger’s Personal Finance. She has also written for The New York
Times, The Atlantic and other publications.

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